It loses $2.8 billion in 4Q, but Wells Fargo optimistic

Thursday

Jan 29, 2009 at 1:14 AMJan 29, 2009 at 9:44 AM

NEW YORK - Wells Fargo & Co. had some good news in its fourth-quarter earnings report even as it lost $2.83 billion.

The banking company that's still absorbing troubled Wachovia Corp. is making loans, getting more money from depositors and maintaining its dividend. And it has no plans to seek more federal financial help.

Wells Fargo's loss grew out of significant charges it took to reduce its exposure to Wachovia's risky assets and a build-up of its reserves to cover future losses. Yet the results also showed that the San Francisco-based bank is holding up better than many of its peers, and the report helped ease some of investors' concerns about the Wachovia deal.

"The underlying results were certainly challenging, but Wells seems to be managing quite well," said Tom Kersting, a financial services analyst at Edward Jones.

Shares soared more than 32 percent, adding $5.17 to $21.36 in afternoon trading.

For the final three months of the year, Wells Fargo reported a net loss of $2.83 billion, or 79 cents per share, after paying preferred dividends. This compares with earnings of $1.36 billion, or 41 cents per share, a year earlier.

Still, the bank extended $22 billion in loans and originated $50 billion in residential mortgages during the quarter. Meanwhile, core deposits increased 10 percent year-over-year and 31 percent over the third quarter.

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